Source Of Problems Will Fix What Ails Us?

ELLEN GOODMAN THE BOSTON GLOBE

July 20, 2002|ELLEN GOODMAN THE BOSTON GLOBE

Here's the TV image I intend to freeze-frame for my Summer of '02 album: an earnest George Bush assuring an Alabama audience that "our economy is fundamentally strong" while the streamer below him follows the stock market down the graph and into the tank.

Our first MBA president, the man who once thought it was a compliment to be called CEO of the United States, now has a credibility gap on the economy as great as his predecessor had on fidelity. His words have no more impact on folks voting with the remnants of their 401(k)s than CEO John Sidgmore's promise that WorldCom was too big to fail.

But even less credible than Bush's economic analysis is his moral analysis. "America," he said, "must get rid of the hangover that we now have as a result of the binge, the economic binge we just went through."

Binge? This was America's binge? We dunnit? Is it possible that the head of Bush Inc. seems to believe that we lost our way in what he now describes as the make-believe land of "endless profit" and "no tomorrow"?

The president spoke as if workaday men and women had let the bubble go to their heads like an overdose of champagne and needed a weekend at Betty Ford to sober up. He even implied that our passion for bubbly was the result of the Clinton era rather than the CEO era, with its weakness for stock options and funny math.

And he spoke as if Bush Inc. had no hand in what Alan Greenspan called a time when "an infectious greed seemed to grip much of our business community."

Whose binge was this anyway?

In the "go-go" 1990s, the income gap between the rich and the poor kept grow-growing. In 1980, CEOs at the largest companies made 42 times what the average factory worker earned. In 2001, they made 411 times as much. Last year the Oracle chief took home $706.1 million.

Today the Who's Who of CEOs who run this administration ranges from a Halliburton vice president to a Searle secretary of defense to an Alcoa secretary of the treasury. In social policy-making, this group went on its own regressive binge. Last year Bush pushed through a $1.4 trillion tax plan that bought off the middle class with a $300 check. Now the clock on the national debt has started up again and the deficit is headed for $165 billion.

Whose binge? The White House cast of corporate characters wants to put some of your Social Security into the same tank as your 401(k). And just moments after he warned of a "hangover," the president was promoting an end to the estate tax -- a windfall for the heirs of Enron etc. Doesn't this sound like what Greenspan called "an outsized increase in opportunities for avarice"?

Yes, millions of Americans got high on the dot-com boom. They got hooked on the "great man" theory of business. The New York Times once dubbed WorldCom's Bernard Ebbers as "A Long Distance Visionary." BusinessWeek put Tyco's Dennis Kozlowski on the cover as the man who has "managed to sail smoothly through the economic slowdown." For a while, you couldn't tell the best-seller list from the Fortune 500.

Now at least when Republicans swallow hard and talk about "personal responsibility," the target is CEOs and not welfare mothers. Now when Congress rants and legislates against people who don't play by the rules, the subject is corporate fraud and not welfare fraud.

But today 60 percent of American households have (less) money in a market that's lost $6 trillion in value. The money, to paraphrase economist John Kenneth Galbraith, has gone the same place your lap goes when you stand up. That's going to translate into millions of Americans working into their "golden years" or helping elders on incomes no longer so fixed.

This investment "hangover" that cuts across geography and ethnicity and age is also isolating. For every American angry at the con game, there is another one angry at herself, mad that she didn't sell high. This early -- yes, early -- in the scandal, it's not clear yet whether we'll think of ourselves as investors with separate crashing portfolios or as citizens with one joint account and accountability.

Into this morass comes Bush with his binge politics, expecting our trust. The same core group that got us into this fix now says they'll get us out. Bush Inc.? The cure for this hangover is going to be the hair of a very different dog.